October 31, 2011

November 8, 2011

The campaign for the U.S. House seat in the 6th District of Kentucky never really ended.

Ben Chandler, the Democratic incumbent, and GOP challenger Garland “Andy” Barr fought to a draw on election night 2010. Then it took another 10 days and a recount for Chandler to emerge the victor with a razor-thin edge of 648 votes.

Chandler has been looking over his shoulder ever since. Within weeks of Chandler’s win, conservative powerhouse Crossroads Grassroots Policy Strategies (GPS) was running radio ads targeting Chandler and 11 other House Democrats.

GPS and its affiliated American Crossroads were among the nation’s big spenders in the 2010 mid-term elections. Crossroads was among the first organizations formed after the Supreme Court ruling in January 2010 unleashed a torrent of mostly unregulated money into the political system.

In this one congressional district, national outside groups — some with Kentucky connections — financed a barrage of negative ads that exemplify how local elections have been transformed into nationally based competitions with a large portion of fundraising and advertising controlled by outsiders.

Democratic and Republican outside groups — called independent expenditure committees — are aiming to raise hundreds of millions of dollars to influence the 2012 election, including the high-stakes rematch between Chandler and Barr.

As a result, residents of central Kentucky have witnessed the advent of the endless political campaign. The ubiquitous pre-election activity provides hints that the 2012 election, still more than a year away, will be no less messy or expensive than 2010.

Kentucky’s 6th District is a microcosm of the unprecedented and often unregulated money that is already flooding the 2012 political landscape. An iWatch News investigation reveals the depth of ties in particular between conservative Crossroads and its insurgent candidate, Barr.

A Kentucky Republican operative said 2012 will be another “expensive slugfest.” The Democratic incumbent calls the outside spending “an outrage to democracy.”

Crossroads GPS was back over the summer with more ads. “Sorry Congressman Chandler. No more reckless spending. No more new taxes. And no more blank checks,” a television ad said, as part of a $20 million national campaign that targets Chandler and nine other Democratic members of Congress.

The Democratic Congressional Campaign Committee (DCCC) countered with its own radio ads, robocalls, billboards and door-to-door canvassing in 44 House districts including Chandler’s. “Andy Barr supports ending Medicare to protect tax breaks for Big Oil and millionaires,” claimed the ads that greeted central Kentucky residents at the gas pumps. (FactCheck.org has called similar DCCC claims “false and misleading.”)

Neither candidate has control or say over the ads, which are sponsored by Democratic and Republican independent expenditure committees that are growing in number, size and influence since the landmark Citizens United v. Federal Election Commissionruling overturned a ban on corporate and union spending in federal elections.

“The people you want to hear from the most — the candidates — are limited,” said Scott Jennings, a Kentucky Republican consultant who does not work for Barr. “The people you want to hear from the least — the outside groups — are unlimited.”

Outside groups poured in millions. Nationwide, issue advocacy and independent expenditure groups spent almost $750 million on campaign activities in the 2010 elections. As a result, the mid-term election saw a four-fold increase in spending over 2006 and became one of the most negative elections in history. The total cost of advertising in House races by all campaign groups increased by 54 percent from 2008 to 2010, most of which came from independent outside groups, according to a Wesleyan University study of 2010 campaign spending.

In the Chandler-Barr contest alone, 16 independent expenditure committees spent nearly $2 million on ads and get-out-the-vote activity, according to the Center for Responsive Politics’ analysis of FEC filings. More groups have joined their ranks in 2011, and predictions are that 2012 will see new levels of spending and advertising. Citizens United, the organization that sued and won the Supreme Court decision, contributed $1,000 to Barr’s campaign in 2010 and contributed another $5,000 this summer.

“I have one word for how much money will be raised in 2012: A lot,” said Dale Emmons, a Kentucky Democratic political consultant who does not represent Chandler. “It won’t be as much as they think in a recession, but it will be whatever they can get their hands on.”

A close look at Kentucky’s congressional election shows that some independent expenditure committees, while steering clear of candidates or their parties as required by law, have a deep history and connection to the state and candidates. It also illustrates the web of decades-long ties among the top tier of political operatives who maneuver for control of Congress and the White House.

Among those is American Crossroads, a Super PAC formed with the help of Karl Rove and Ed Gillespie, former advisers to President George W. Bush. It also formed Crossroads GPS, which by law does not have to disclose the identity of its donors. Together, the two groups poured almost $70 million into at least 20 House and 11 Senate races in 2010. Among those was the successful election of Tea Party candidate Rand Paul as senator from Kentucky. (Crossroads has announced its intention to raise a quarter of a billion dollars for 2012, dwarfing its maiden foray.)

American Crossroad’s first donor — and one of its largest contributors — is Bradley Wayne Hughes, chairman of Public Storage Inc. and owner of Spendthrift Farm, a horse breeding farm in Chandler’s district. Hughes has contributed $3.5 million to American Crossroads and $2,400 to Barr’s 2010 campaign. Barr told iWatch News he does not know Hughes well and met him on one occasion. Hughes’ son sits on the board of American Action Network, another independent expenditure committee that ran ads against Chandler in 2010 and coordinates with American Crossroads and other groups supporting Republicans.

Other Kentucky-related donors made contributions to both American Crossroads and Barr. Alliance Resource Partners, whose subsidiary owns a mine in western Kentucky where two miners died in April 2010, donated $2 million to American Crossroads, and its employees donated $6,400 to Barr’s campaign.

Kentucky connections also run through the internal workings of American Crossroads. Its president is Steven Law, who Barr first met in 1993 when Barr was an intern and Law was chief of staff to Sen. Mitch McConnell, R-Ky., who is now the Senate minority leader. Law also contributed $1,000 to McConnell’s political action committee in 2009 when Law was general counsel at the U.S. Chamber of Commerce, which directed advertising against Chandler in past elections. Barr said he has not seen Law since 1993. McConnell’s political action committee, Bluegrass Committee, contributed $5,000 to Barr in 2010.

Crossroads’ banker

American Crossroads also looked to central Kentucky for its banking needs. It deposits its money in Forcht Bank, one of Kentucky’s largest bank groups, founded by Terry E. Forcht, a Louisville native whose business is located in Chandler’s district. American Crossroads uses Forcht Bank at the advice of Michael Duncan, former chairman of the Republican National Committee and chairman of American Crossroads, who himself owns community banks in Kentucky.

American Crossroad spokesman Jonathan Collegio said that, because Duncan is on the state Republican committee, he is not involved in any Crossroads decisions about Kentucky races. Duncan, who has known Rove since college, also contributed $1,000 to Barr’s campaign in 2010. Barr said he knows Duncan because of his role in Kentucky Republican politics, but he has never discussed American Crossroads with him.

Forcht is chairman and CEO of the Forcht Group of Kentucky, a group of 95 companies mainly in central Kentucky, including banks, nursing homes, radio stations, newspapers, insurance agencies, construction and real estate companies, and a thoroughbred horseracing farm. No public records show that Forcht donated money to American Crossroads, and Collegio said the only Forcht connection is that it is American Crossroads’ bank.

Forcht, his wife and employees of his companies have always contributed heavily to Republican parties and candidates, including $31,450 to Barr in 2010. They also contributed to the Republican Party of Kentucky, the National Republican Senatorial Committee, and Rand Paul.

Forcht did not return phone calls for comment.

Forcht also contributed $30,000 in 2010 to the National Republican Congressional Committee (NRCC), which spent more than a half million dollars on ads attacking Chandler as pro-environmentalist and linking him to Obama’s stimulus plan. One ad featured a whining Chihuahua to represent Chandler as a “lapdog” to then-House Speaker Nancy Pelosi. So far in 2011, the Forcht family has contributed another $30,000 to NRCC and $5,000 to Barr. A Forcht business associate also contributed $1,000 to Barr in June 2011.

“They scorched the earth with those ads,” Emmons, the Democratic political consultant, said about the ads attacking Chandler. “They threw the red meat out there to attract the jackals and it worked.”

Carl Forti, political director at American Crossroads, said during a December 2010 workshop in Washington, D.C., that his organization took advantage of an angry electorate. “People didn’t get angry because they saw our TV ads. The anger’s been growing for two years,” Forti said. “People were unhappy. We fed into that unhappiness. We helped direct it, but it was there. It wasn’t something that we were able to just generate. I wish we had that kind of luck.”

The ads even inspired a rogue housewife and Tea Party activist in Harrodsburg, Ky., to start her own one-woman campaign, creating a website titled “See Ben Spend” and a dozen YouTube videos attacking Chandler. “They are meant to be snarky. I wanted to go after him,” said Eunice Logan, who has more than 12,000 visitors to her site and contributed $2,900 to Barr in 2010 and 2011.

The rematch

Barr has taken on a formidable candidate in Chandler. Barr is a young Lexington lawyer with Tea Party support. He had never run for office until he challenged Chandler and almost beat him.

Chandler is a 20-year veteran of federal and state public office who had coasted to victory in his races prior to 2010. His grandfather served as governor, U.S. senator and the second commissioner of Major League Baseball. Chandler has no trouble raising money, including from the Office of the Commissioner of Baseball, and he outspent Barr by more than $1 million in direct contributions in 2010. Chandler benefited greatly from donations from established politicians, labor unions and corporations.

With a large campaign chest, Chandler ran the first 2010 candidate-financed television ads, which were positive reflections of his accomplishments. But by the end of the campaign, both Chandler and Barr were running their own negative ads alongside those sponsored by independent expenditure groups.

Two independent expenditure committees spent $538,000 to discredit Barr. The DCCC spent $486,778 on ads claiming seniors should not trust Barr because he wants to abolish Medicare and put Social Security “in the hands of Wall Street.” Eight other committees spent $220,000 to support Chandler.

In comparison, four outside groups spent $1.1 million in efforts against Chandler. One of those was Americans for Tax Reform, which spent $293,288 on ads claiming Chandler doesn't deserve re-election because he voted “over and over again to raise your taxes” (a claim the Lexington Herald-Leadercalled “mostly false”). Two other groups also spent $91,000 in support of Barr.

Kentuckians still contribute to the candidates, but when they want to give large amounts of money they turn to independent expenditure committees that, unlike candidates, do not have limits on donations. And unlike candidate committees, these so-called “Super PACs” can accept contributions from corporations and labor unions.

When Chandler’s friends saw ads attacking Chandler, they called Andrew Horne, a Lexington lawyer and political maven, and said, “Ben is really getting attacked. We want to help but we don’t know how,” Horne recalled. He quickly formed an independent expenditure committee called 2010 Leadership Council that raised $315,000 in just three weeks from a handful of Kentucky and national donors including a Texas billionaire, a horse breeder, bourbon distiller, and a labor union. “Candidates used to run elections on lots of little contributions in their own districts, but we needed to do it differently this time,” Horne said.

The 2010 Leadership Council spent its money on counterattack ads for seven House Democratic candidates, with the largest amount — $85,753 — on anti-Barr radio and television ads exposing Barr’s arrest as a college student for possessing a fake Mississippi driver’s license and then lying about it on a job application. The DCCC jumped in with a series of “Pants on Fire” ads calling Barr a “Lobbyist. Lawyer. Convicted criminal.” Barr said those ads went too far because they were personal attacks of the type that were never lodged against Chandler.

“It’s regrettable that it got so nasty,” said Barr, 37, who admits that the outside group ads both helped and hurt his campaign. “I prefer to speak directly to the voters and not have that distraction.” He is determined to defeat Chandler next year, and try to change the “toxic” tone in Washington.

Chandler, 52, said campaigns have gotten nastier but “If you get attacked then you have to attack back.” He said the outside ads were financed by “right-wing high rollers and the fact that the public does not know who is contributing is an outrage to democracy.”

Both candidates seem at times to be mere surrogates for national forces struggling for primacy over Kentucky’s 6th District. Chandler said the outside spending marks a “sea change in American politics” that is “a terrible development in this political process” because of the negative tone and the need to continually raise money.